Day trading can be a thrilling way to make money. But it's more challening than most beginners think. Here are some day trading tips that can help the new trader as well as the more advanced trader to achieve your goals faster.
Tip #1: Do not over trade. The market is a random walk most of the time, meaning that it's moving around without a pattern that can forecasted. Retail traders taking small positions in the market cause this meaningless movement.
The amateurs don't affect the market in any significant manner. The pros, with their big positions and their commitment to hold trades for longer periods of time, create longer term moves that can provide large profits.
Many people are drawn to day trading because of the excitement of the business and the potential for big, fast profits. This attitude sets up the trader for failure. Day trading does not have the frantic energy of a video game. Most successful day traders sit by the sidelines for long periods of time simply waiting for a high-probability setup to occur. The pros trade much less frequently than the amateurs think.
Second: The common axiom "The trend is your friend" is a half-truth.
It's more accurate to say that the trend is a fair weather friend!
It's true that the trend is your friend early on. But trends get exhausted and end. It's more accurate to say: "The trend is your friend, until the end."
Therefore there are 2 times to trade when you can put statistics on your side:
When a new trend is just starting.
Late in an old trend.
Trading at these two times lets you put the "edge" of the bell curve on your side. Trading mid-trend, puts you in the middle of the bell curve where the outcome is completely unpredictable.
Third: Listen to free chat rooms for day trading tips and do exactly the opposite!
The biggest benefit usually doesn't come from listening to the room leader. It often comes observing the chatter of the participants while they comment on what trades they are getting into.
Most of the time they do the exact opposite of what they should be doing.
They reveal the mind of the unprofitable retail traders. It's almost eerie how the amateurs think alike when it comes to trading the markets. If you listen to them long enough in the trading rooms you'll start to notice the patterns of the things they do consistently. Do the opposite and win.
One of the most common things I've noticed traders do in these chat rooms is trading against the trend. It's almost a mantra as they say: "The market can't go any higher." "The market has to turn around here." "This market is way over-extended."
It's uncanny how the retail traders as a group, seem to be determined to find tops and bottoms. For some reason they have a hard time trading with the trend and seem obsessed with trading against it. Of course this can spell big money for you. Once you know what the amateurs are doing, you can make money be trading against them.
Day trading can be very profitable, but to succeed you must not align yourself with the masses. You must avoid the herd instinct that drives the losers. Use these 3 day trading tips to help you on your journey toward being one of the minority who succeeds.
Author Resource:-
Dr. Barry Burns is the president of Top Dog Trading, writes a day trading blog and offers a free 5-day video course which offers day trading tips. He has spoken to DayWealthUSA, "Elite Masters of Trading," and Wealth Expos.
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